Financial Solutions: The Manila Battleground

Target Manila

For the players this has been the battle cry.

Software Vendor - Software MOduleThe vibrancy of competition for financial solutions market in the Philippines shows no signs of abating. With the country’s sound economic fundamentals and robust growth, investors flock in, cash keeps flowing in and investment confidence rises and investment awareness among the masses grows. Big and small investors would try various investment schemes.

Banks and investment centers, legally obliged by compliance and regulation to have a software solution to manage their investment products, constantly need newer, better and more suitable technology solutions. With the bigger market slice up for grabs, software providers aggressively promote their products even as new players, promising better products, tossed in.   Bottom line, an immense competition and it’s going to be fierce and perennial.

Though investment houses are abound, it will be the Banks that would set the pace. Banks are the bigger hunters for financial solutions. Cash-rich Banks are bigger, offer more liquid investments, more trusted and more popular with the masses for their stability and prestige.  Moreover, Banks have partially captured old and new wave of public investors’ market, as they are their own depositors or clients.

My personal estimate is that there is about thirty to fifty banks headquartered in Manila including fifteen of the biggest and most competitive banks in the country today. Backbone (or should I say bank-bone) systems Trust, Treasury, Trade Finance, Risk Management, Fix Income, Capital Market are just like the nerve centers of financial organizations thus, the demand for such systems is fundamental.

Vendor-dependency does not end either upon technology purchase or after technology acquisition. New accounting standards and compliance issues must be fitted in the system. Technical maintenance requirement, version upgrades, business trends, technology refresh, new business rules must be constantly adopted by the system. Thus the need for the software solution and the vendor-dependency to match becomes more incessant. Consequently, the financial solutions market in the Philippines becomes lucrative business for software providers but fiercely competitive.

As the Philippine economy upswings validated by the third Investment grade rating by Moody’s (after Fitch and Standard & Poor’s), investment consciousness among the masses is on unprecedented rise since IPO boom in mid 90s. Banks and Investment houses need new systems to handle old and new investment products that once again breathed into life – UITF, Trust Fund, PERA, Retail Treasury Bonds. An influx of new vendors is expected to join the bandwagon but the major players are likely to dominate the market. Giant Software vendors – MiSys, CCK, and SunGard, who have entrenched a significant foothold in the local market through customer-based foundation, are expected to make a killing.

In my stint as a Project Analyst working in a Bank, I have the pleasure of crossing path with these vendors. Here’s my three cents worth of thoughts.

 MiSys

MiSys is the global leader in financial software industry. Locally, MiSys iconMiSys rings the loudest bell in the banking industry as far as providing core banking solutions. MiSys popularity with the local users for its vast market hold makes it the most popular banking software vendor in town. Opics Plus, Misys’s Treasury solution and used by two major banks in the Philippines, is based on Service-Oriented Architecture (SOA) and XML Web Services. A brilliant architecture appropriately blends with the current technology trend that allows applications of different platforms to communicate with each other.

What I’d like to see for MiSys, with its vast local clients, is that it would implement a reduced and standard pricing scheme when customization costs are shared by clients directly benefitted by the customization. I have known some great guys from MySys over the years –  Tim Horsley, Kelvin Loh and Noli Romualdez among them. They’re the MiSys’ go-to-guy kind of guys but otherwise unassuming, friendly and casual.

SunGard

They probably are the nicest people in the business. SunGard can SunGard iconboast of its stability, it’s financial strength, for a reason. SunGard, a $4-Billion technology Services Company, primarily focus on wealth management, has a wide dominance as a technology service provider in the global market. Locally however, they have some things to work on with the users. A new team is created to address the issue. And that’s good news.

Trust is a lucrative investment scheme in the Philippines business in the Philippines. UITF varieties, Corporate and Personalized Trust products and Agency Services, Investment Management Account services among others are the most promising yet safest investment instruments in the Philippines. SunGard’s Trust solution, TAPS, specializes on these investment instruments. If the customization efforts for TAPS could effectively align with the local way of doing business, the users’ desired way then TAPS is gaining ground. I don’t want to see TAPS just elevate to higher ground. I want to see TAPS blast off!

CCK

CCK has been quite around in the market and aggressively competing SunGard and MiSys. It’s interesting to note that Guava, CCK’s Treasury system, uses an untraditional database technology called Gemstone, an Object-oriented Database Management System (OODBMS) as oppose to the mainstream Relational Database Management System (RDBMS). OODBMS uses Object-oriented model where data is stored in a chain of objects, and objects are data elements containing instructions to represent real-world objects. There are claims that OODBMS produce better performance especially when handling complex data inter-relationship involving multi-media files.

But RDBMS stands tall to nearly all business-driven application where data structure are easily represented by tables and keys in a way that it’s easier to understand by end-users and developers alike. The main battle for CCK (for Guava system) is its challenge to mainstream recognition of RDBMS as the standard database system. RDBMS is predominantly used by 99% of client-server database users. The underlying challenge of using OODBMS is its complexity and skills availability.

Let me end by sharing what the precious insight in Project Management. Incidentally, it was from CCK guy named Frank Cavaleri (This guy was such character. He was always on festive mood especially when feasting over a sumptuous meal. ‘l love food!’ as Frank would say with gusto). Frank said that in project implementation management, when you are unsure along the project line that what you are implementing might not be the best method or the best alternative, or when you cannot find the finest method, implement it anyway.

At the end of the day, it’s better to have implemented the less best than to have none at all. On a project scale, it’s better to have implemented a project which might not be in the best form as conceived rather than having a project that remains unimplemented;

Good project wisdom, don’t you think?

 

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